The Parliament Magazine: Defence industry needs ‚more Europe‘

The Parliament Magazine: Defence industry needs ‚more Europe‘

Though MEPs support new Commission proposals to develop Europe’s defence industry, the role of SMEs and having ‘geographic balance’ is of concern to some deputies. 

In early November, 23 EU member states agreed to a permanent structure for defence cooperation (PESCO), making security a key political priority. With Europe taking increasing responsibility for defence, the European Commission considers it crucial to improve competitiveness and enhance innovation through funding of research programmes within the defence industry. The newly-proposed European defence industrial development programme (EDIDP) will run from the 1 January 2019 to 31 December 2020.

According to the Commission’s own figures, the sector directly employs around 500,000 people, with a further 1,200,000 indirect jobs. With a turnover of €97.3bn in 2014, defence represents a major part of the EU’s economy.

According to French EPP group deputy Françoise Grossetête, Parliament’s rapporteur on the EDIDP, “The European defence industrial development programme is a first concrete step to greater cooperation in Europe. With a budget of €500m to co-finance projects, the EU wants to establish new synergies now and for the period after 2020.”

Grossetête believes the industry needs “more Europe” to provide more reliable, independent and less costly technology for our armed forces.

Recognising the increasing number of threats facing the EU, she said, “In an unstable international environment, Europe’s security needs are increasing. Cooperation therefore provides essential added value in responding to these challenges.” She also highlighted how investing in defence technology could have significant spinoffs “in both economic and human terms.”

She stressed that, “this programme should be a means of strengthening EU independence in defence. This strategic autonomy is essential in ensuring the EU is free to take action worldwide.

Developing the industrial and technological base of European defence is key to this autonomy.” However, Grossetête believes that EU funds should only be spent on European companies.

S&D group shadow rapporteur Miroslav Poche said that this new initiative would “empower Europe to reach two key goals at once. Not only will it have an indisputably positive effect on the state of the EU’s economy, it will also signal the emergence of a long-awaited, intrinsically European, defence capability.”

However, Poche wanted to see greater support for small and medium-sized enterprises (SMEs). “The S&D group is actively working to boost the involvement of SMEs in the programme through special incentives.”

Another priority for Poche is to dedicate financing from the new programme to ongoing projects, such as the Connecting Europe Facility (CEF) and the Galileo navigation satellite system.

Overall, Poche was positive about the proposal; “By actively fostering cooperation in the areas of defence and cyber-defence, the EDIDP brings many unique opportunities in a single package, including means to develop novel defence capabilities, to rebuild the trust citizens place in our ability to protect the Union and obtain the capabilities to uphold our policies on the international stage.”

According to Polish ECR deputy Zdzisław Krasnodebski, the European defence sector needed to take advantage of the “full potential of all European actors” if it was to be successful.

He added, “it is important to balance the European industrial and technological base of the defence sector, which should include those companies that have not yet had the opportunity to participate in large international projects.”

The Polish MEP had many concerns with the Commission’s proposals, saying “The regulation, in its current form, will favour transnational corporations that will be able to arrange virtually any research project with their present partners.”

He highlighted how Poland’s growing defence sector was missing out on involvement in some of Europe’s ‘big-ticket’ defence projects, currently dominated by Europe’s more established defence companies in the west. “There is a risk that the programme budget will be used to finance existing projects. This would play into the hands of the largest European companies, weakened by cuts in the defence budgets of some EU member states.”

He continued, “By using the programme as a substitute for state aid for several participants, we will lose the chance to create a defence industry that responds to Europe’s security needs.

Therefore, I believe that the award criteria should emphasise new cooperation between applicants and that geographic balance would be an indispensable indicator.”

French deputy Dominique Riquet fully backed the EDIDP, saying; “I fully support establishing a European fund to invest in common industrial research and development between member states projects in the area of defence.”

However, the ALDE group member was “saddened” to have to describe Europe’s defence industrial sector as a “dwarf” compared to its main competitors, which had invested heavily in research.

He pointed out that a member state on its own was “unable to respond to the new world challenges and threats; the EU would be the world’s second largest power if we gathered together our national defence budgets.

“This programme is a much-needed first step for enhancing collaboration in the field of defence. The savings for the EU could reach €100bn through the efficiency of synergies between member states.”

He stressed the positive civilian spin-offs from new innovations in the defence sector could potentially be significant, “as proven by the effectiveness of the military-industrial complexes in the US, China, and Russia.”

He added, “This mechanism is at the source of numerous technological transfers towards the civilian sector, ensuring a real competitive advantage to their economies. It maybe be wishful thinking today, but it is an objective to aim for if one seeks a secure and prosperous future for Europe.”

About the author
Rajnish Singh is commissioning editor of the Parliament Magazine

https://www.theparliamentmagazine.eu/articles/opinion/defence-industry-needs-more-europe